Kraft-Tharp’s Bill to Modernize Business Tax Code Signed by Gov

(June 4) – In an important step toward modernizing Colorado’s business tax code, Gov. John Hickenlooper signed Rep. Tracy Kraft-Tharp’s bill into law.

“It helps businesses to have predictability and uniformity when they are looking to get off the ground or relocate,” said Rep. Tracy Kraft-Tharp, D-Arvada, a prime sponsor of HB18-1185. “By modernizing our convoluted tax code, this bill will make Colorado a more competitive state to do business, and will help make our state a go-to place for locating businesses’ headquarters.”

HB18-1185 will change the way Colorado calculates income tax for businesses by transitioning to a “market sourcing” approach. This means that, beginning January 2019, businesses will calculate their Colorado income taxes from services based on where the service is delivered, rather than where the service is performed. This change will put Colorado’s tax code on par with the majority of other states.